Author: Seamus Coffey

A couple of charts and commentary from recent Macro Financial Reviews published by the Central Bank on non-property SME/corporate lending in Ireland.

Macro Financial Review 2013:1

Irish SMEs and non-financial firms are operating under considerable macro-financial headwinds.  Overall, the sector accounts for 19 per cent of the domestic banks’ aggregate loan book. The value of impaired loans stood at €10.8 billion in December 2012, representing 25 per cent of the SME/corporate loan book, up from 21 per cent of the book at the end of 2011.

Macro Financial Review 2013:2

The exposure of the domestic banks to SME/corporate and CRE portfolios is also substantial, representing 19 per cent and 18 per cent of the domestic banks’ aggregate loan book, respectively. Impairment rates are noticeably higher than residential mortgage portfolios. The latest data indicate that impaired SME/corporate loans have risen from 24 per cent in 2012 Q2 to 27 per cent in 2013 Q3 while CRE NPLs went from 51 per cent to 61 per cent over the same period.

If loans, classified as “watch upper” and “watch lower” by domestic banks are included with impaired loans, the percentage of “vulnerable” SME/Corporate loans in 2013 Q3 rises to 45 per cent while the equivalent figure for CRE is 78 per cent.

The Irish Times today, page 2:

$36m

Amount Apple paid in Irish taxes between 2004 and 2008, despite the 12.5% rate meaning they have paid in the region of $890m

Editorial: Apple’s lucrative tax loophole

…figures obtained by The Irish Times show that between 2004 and 2008 the consumer electronics giant reduced its Irish tax bill by over €850 million…

Yes, because the profits of a US company selling products designed in the US, manufactured in China and sold to customers in Australia actually should be taxed in Ireland (only we’re not sure whether it is in $ or €).

Prof. Morgan Kelly at the UCD Economics Society.

• Part 1: Presentation
• Part 2: Q&A Session

Yesterday, the EC published the results of the in-depth reviews under the Macroeconomic Imbalance Procedure.  The conclusion for Ireland is that there are “imbalances that require specific monitoring and decisive policy action”.

The MIP has been around for a couple of years but it is still far from clear that it has delivered anything.  One thing we do get are documents which compile and illustrate a very broad range of data on the Member States.  Yesterday these included the in-depth review of Ireland which has 65 graphs to peruse, but with little to be learned.

Speeches: José Manuel Barroso and Eamon Gilmore.